Bitcoin trading soars in Argentina, Brazil as local currencies weaken

[kolbalish]

DeFi might be all the rage in crypto. But traders in the troubled economies of Argentina and Brazil appear to be turning to Bitcoin as their currencies falter.

While DeFi may have some traders dreaming of complicated lending strategies and governance protocols, in certain parts of the world it’s still Bitcoin that promises a censorship-resistant way to protect against rapidly inflating local currencies.

According to a recent report from analytics firm Arcane Research, Bitcoin has just broken price records in Argentina, Brazil, and Turkey—with growth (in fiat terms) of 169%, 20%, and 5%, respectively, over the last two months.

In truth, however, these stats say much more about the troubled state of these countries’ economies than it does about any growing local interest in crypto. But when it comes to Argentina and Brazil, in particular, a surge in local Bitcoin trading volume suggests crypto could be gaining favor among traders as a hedge over other instruments.
Both Brazil and Argentina were already experiencing financial crises long before the coronavirus pandemic, which has only made things worse.

The financial turmoil brought on by COVID-19 pandemic, which Brazil’s president suggested in May was just a “little flu,” has seen the real (the local Brazilian currency) devalued by more than 30% against the US dollar. Interest rates have also fallen to historical levels of 2% per year, causing the popular strategy of investing in fixed-income instruments to be set aside in favor of funds, stocks... and, it appears, even cryptocurrencies.

The more about this topic is here: https://decrypt.co/38238/bitcoin-trading-soars-argentina-brazil-local-currencies-weaken?amp=1

[The Sceptical Chymist]

But when it comes to Argentina and Brazil, in particular, a surge in local Bitcoin trading volume suggests crypto could be gaining favor among traders as a hedge over other instruments.

A hedge against what?  There's a lot of economic turmoil in S. America last I checked, and it doesn't seem like the people there would be turning to bitcoin as a safe-haven asset.  As a currency, perhaps, but from everything I've read about the hyperinflation situation in Venezuela and other countries, the use of bitcoin and altcoins hasn't really caught on.  That does make me a bit curious as to why the price of btc has apparently exploded in Argentina and Brazil.  Are their citizens getting a lot of relief money from the government?

All this talk of Defi got me curious enough to read a little about it, though I can't say I completely understand what it's all about.  Part of me thinks it's getting the hype that ICOs/IEOs got in the past couple of years, which is making me skeptical.  Anyway.  Thanks for posting the article, OP.

[sunsilk]

I wouldn't blame their president for thinking or saying that it's just little flu which resulted in their currency to be weakened. The majority of the countries in the world that have been hit by the pandemic are drowning in the economy although, some are starting to recover.

There should be encouragement from him and that's why he said that for his constituents. But too bad it ended with too many cases.

Just like the other thread that I've commented on, their currency is also weakening which turned bitcoin to ATH through their fiat currency.

Particularly, it's this thread: BTC has hit ATH against Turkish Lira.

[AjithBtc]

Years back itself there is a strong base for cryptocurrency usage in Brazil. If I'm not wrong it is the first country to have a coffee shop accepting bitcoin. This has been taking place from the past, with the local currency weakening of Zimbabwe onwards people started to move towards cryptocurrency.

Same as that now Argentina and Brazil has joined. In the past economists suggested Zimbabwe government to adopt bitcoin to get out of the financial crisis. By the time it is also a must to know about DEFI, because as a user stated it is getting hyped as the past ICO/IEOs.

[rhomelmabini]

Years back itself there is a strong base for cryptocurrency usage in Brazil. If I'm not wrong it is the first country to have a coffee shop accepting bitcoin.

It's Argentina not Brazil and the first cafe to start accepting bitcoin was located on Buenos Aires, they call their cafe BitCoffee.

You can read more about this article dated way back 2015 https://www.lanacion.com.ar/tecnologia/buenos-aires-tiene-el-primer-cafe-de-america-latina-que-acepta-bitcoins-nid1792436/

All this talk of Defi got me curious enough to read a little about it, though I can't say I completely understand what it's all about.  Part of me thinks it's getting the hype that ICOs/IEOs got in the past couple of years, which is making me skeptical.  Anyway.  Thanks for posting the article, OP.

I think we can call that a wave. More like it (the hype) and as I see there are more and more defi projects are being built more like FOMO imo.

[wxa7115]

Bitcoin trading is really soaring in Argentina and it is not difficult to know why, in the case of Brazil they had at least many years of prosperity but since then they have had problems and the pandemic has hit them particularly hard, but in that case of Argentina their economy has been facing problems during the last decades, just last year the inflation was above 50%, yep you read that right the Argentine peso lost half of its purchasing power in just a year.

And when you add the pandemic and one of the most closed economies of the world it is not really a surprise that their citizens are trying to find any way they can to survive.

[exstasie]

I don't see this particularly reflected in Localbitcoins volumes as one would expect, so I'm going to remain skeptical about this:





This is such a common Bitcoiner narrative (that currencies are failing and causing people to buy BTC) that I've come to expect extreme exaggerations on this front.

[adaseb]

I don't see this particularly reflected in Localbitcoins volumes as one would expect, so I'm going to remain skeptical about this:



This is such a common Bitcoiner narrative (that currencies are failing and causing people to buy BTC) that I've come to expect extreme exaggerations on this front.

Yes generally these are click bait articles. Usually there is some large spread but the volume is so small that it doesn't make much difference. This is nothing like that Kimchi premium that we had back in the 2017 days.

[romero121]

I don't see this particularly reflected in Localbitcoins volumes as one would expect, so I'm going to remain skeptical about this:



This is such a common Bitcoiner narrative (that currencies are failing and causing people to buy BTC) that I've come to expect extreme exaggerations on this front.

Yes generally these are click bait articles. Usually there is some large spread but the volume is so small that it doesn't make much difference. This is nothing like that Kimchi premium that we had back in the 2017 days.

We don't know what exactly is happening in the Brazilian or the Argentina market, what happened with Korea is something different. 2017 kimchi premium scenario can't be related with the localbitcoins volume. There it was the local exchange which has the price difference of upto 50% from the western exchanges.

This all happened out of demand, which is the reflection of greed. Here it is all about the money devaluation making the people to move towards a safe haven.

[Fundamentals Of]

I don't see this particularly reflected in Localbitcoins volumes as one would expect, so I'm going to remain skeptical about this:

We don't know whether Localbitcoins is the people's choice in making exchanges there but even if Localbitcoins is the most popular option it will probably still not reflect significantly on the charts. We can be certain that not even 30% of the mentioned countries' population are into Bitcoin.

This is such a common Bitcoiner narrative (that currencies are failing and causing people to buy BTC) that I've come to expect extreme exaggerations on this front.

That equation of fiat value falling is equal to people shifting to Bitcoin is even an exaggeration in itself already.

[pooya87]

DeFi might be all the rage in crypto.

no it is not. the DeFi hype is 10 times less than the last same scheme and is the follow up to the same original scheme of raising free money for doing nothing called ICO. and each new one fails worse than the last.

According to a recent report from analytics firm Arcane Research, Bitcoin has just broken price records in Argentina, Brazil, and Turkey—with growth (in fiat terms) of 169%, 20%, and 5%, respectively, over the last two months.

that is not growth, that is staying the same.
when fiat value tanks, it is obvious that price of everything goes up against fiat. and that is what happened here. if you convert bitcoin bought with Turkish fiat to USD you still get the same 11 thousand something dollars no matter how much more Lira you paid.

[tbterryboy]

We have seen a lot of countries in the recent years like Venezuela or even Cyprus early when bitcoin started where having bitcoin would mean that you would be richer than rest of the public. Recently we have seen Brazil, Argentina and there is a topic about bitcoin price breaking the ATH levels in Turkey as well because their fiat is losing value as well.

So, I would say that bitcoin is not something you should check out with just dollars, that is for people who spend dollars, you could also be someone who lives in a country that has a fiat aside from dollars and you could totally make a profit with your own fiat, and while keeping your purchasing power around the same or maybe even increase it a bit, everyone else will be losing the value of their money.

[stompix]

I don't see this particularly reflected in Localbitcoins volumes as one would expect, so I'm going to remain skeptical about this:
This is such a common Bitcoiner narrative (that currencies are failing and causing people to buy BTC) that I've come to expect extreme exaggerations on this front.

The pump press again with their stupid clickbait titles
So, in BTC volme the numbers for the lastweeks for those countries are:

Argentina: 97,89,87
Brazil        49,45,45
Turkey       8,7,5

The volume in Turkey has soared to an incalculable amount of 5BTC per week, less than 10 000$ a day!!!

Years back itself there is a strong base for cryptocurrency usage in Brazil. If I'm not wrong it is the first country to have a coffee shop accepting bitcoin.

No, you're not wrong, you're totally wrong! The the first coffee shop in Latin America that accepted bitcoin was in Argentina and it was 3 years late to the party compared to the US and Europe.

[samcrypto]

I don't see this particularly reflected in Localbitcoins volumes as one would expect, so I'm going to remain skeptical about this:



This is such a common Bitcoiner narrative (that currencies are failing and causing people to buy BTC) that I've come to expect extreme exaggerations on this front.

Yes generally these are click bait articles. Usually there is some large spread but the volume is so small that it doesn't make much difference. This is nothing like that Kimchi premium that we had back in the 2017 days.

Just like the situation before on Venezuela and Greece, they claimed that people are starting to buy bitcoin and yet the volume is not that convincing.

Well, the whole economy is struggling not just on the said country so we can really say that they started to learn how bitcoin works but the effect of that is not instant so let’s wait for further trend. The falling country should not be the sole reason of mass adoption, it must be organic.

[sana54210]

It also makes sense for a low level country citizen to keep his money at bitcoin because to be honest there is a bonus profit from it for yourself.

You do not buy stuff with dollars there, go to any third world country and you will realize that things are cheaper there, you can stay in a 5 star hotel for 20-30 dollars a night, whereas in USA for example that is a side of the road motel at best for you, 5 star proper holiday inn style is at least 100 bucks if you are out of season and standard room, could be as high as 5000 dollars for you. That is why I think it is quite great for a Brazilian for example to buy bitcoin, because it values up in dollars but also dollar values up against their fiat, so they profit with a bit of bonus as well and get even richer than an american would.

[Spaffin]

As far as I know, the citizens of Argentina and Brazil have practically no opportunity to save their savings, since their national currency depreciates very quickly. The only correct decision is to invest in other currencies. I believe that cryptocurrency assets in any case for these countries is the best way to save money, compared to the dollar. In addition, given not only political but also economic realities in Latin America in general, not only in Brazil and Argentina, but also in other countries, the number of clients of the cryptocurrency market is increasing.

[AjithBtc]

Years back itself there is a strong base for cryptocurrency usage in Brazil. If I'm not wrong it is the first country to have a coffee shop accepting bitcoin.

It's Argentina not Brazil and the first cafe to start accepting bitcoin was located on Buenos Aires, they call their cafe BitCoffee.

You can read more about this article dated way back 2015 https://www.lanacion.com.ar/tecnologia/buenos-aires-tiene-el-primer-cafe-de-america-latina-que-acepta-bitcoins-nid1792436/

Years back itself there is a strong base for cryptocurrency usage in Brazil. If I'm not wrong it is the first country to have a coffee shop accepting bitcoin.

No, you're not wrong, you're totally wrong! The the first coffee shop in Latin America that accepted bitcoin was in Argentina and it was 3 years late to the party compared to the US and Europe.

Thanks for the article that corrects me. I was bit confused between the countries Brazil and Argentina.

[kolbalish]

It also makes sense for a low level country citizen to keep his money at bitcoin because to be honest there is a bonus profit from it for yourself.

You do not buy stuff with dollars there, go to any third world country and you will realize that things are cheaper there, you can stay in a 5 star hotel for 20-30 dollars a night, whereas in USA for example that is a side of the road motel at best for you, 5 star proper holiday inn style is at least 100 bucks if you are out of season and standard room, could be as high as 5000 dollars for you. That is why I think it is quite great for a Brazilian for example to buy bitcoin, because it values up in dollars but also dollar values up against their fiat, so they profit with a bit of bonus as well and get even richer than an american would.

I am from third world country and you simply explain the harsh reality. Yes things are cheaper here and it based on the area's community standard where people are not much rich as we often see it on Western and Eastern world. It can be a great deal of third world countries also.

[smyslov]

I wouldn't blame their president for thinking or saying that it's just little flu which resulted in their currency to be weakened. The majority of the countries in the world that have been hit by the pandemic are drowning in the economy although, some are starting to recover.

There should be encouragement from him and that's why he said that for his constituents. But too bad it ended with too many cases.

Just like the other thread that I've commented on, their currency is also weakening which turned bitcoin to ATH through their fiat currency.

Particularly, it's this thread: BTC has hit ATH against Turkish Lira.

Their president don't want their people to panic but it's a bad strategy the people ended up relaxed and majority did not follow the health experts guidelines of social distancing and wearing mask and besides Brazil is a mega city the city is heavily congested because there are so many slum areas there, people would rather stay outside than at home.

[dothebeats]

There's literally a small chance that these countries would still see bitcoin as the better option to use their money at this given time, especially since those two countries are the ones badly hit by the pandemic on that part of the globe. Not sure whether these data are padded or modified, but it's just unusual and really improbable that they would think of hedging or saving the value of what they have rather than their lives at this point. Perhaps the price in itself soared due to the currency being weaker and weaker by the day, but trading volume remains low IMO--and in reality.